Yikes. The college’s “actual” operational expenditures are going to be eight percent higher than originally predicted when its 2023-24 budget was created this March.
Not to worry. That “overage” is more than offset by the fact that its operational revenues are now projected to be coming in at a rate of 12 percent more than originally budgeted.
All of which leads to a new projection for a record-setting year-end financial surplus of $52.1 million – up from what had originally been anticipated to be a healthy $37.9 million worth of “bottom-line black ink”.
All of that good news was contained in Chief Financial Officer Marc Jones’ mid-year budget revision report to the Board of Governors during its November 28 meeting.
The college, like the provincial government, operates on a fiscal year starting on April 1, and ending on March 31.
Jones revised his original financial forecast based upon the “actual” revenue/expenditure numbers accumulated between April and September/October of this year.
The now-predicted windfall of $52.1 million will be the sixth consecutive, eight-figure surplus in the college’s past half-dozen fiscal years – and the largest in the school’s 55-year history.
It has adopted a practice of retaining a significant portion of those annual profits in “rainy day” reserve funds, to allow the school to continue to operate in stable fashion even if a catastrophic situation was to temporarily devastate enrolment (a pandemic even more severe than COVID, geopolitical strife curtailing international admissions, etc.).
The Board has also allowed some of the surplus money to be used to tackle “deferred maintenance” projects – tackling long-overdue repair and renovation projects within some of the school’s half-century-old buildings.
But it has also, during the past several years, taken several million dollars of the surpluses and injected the money into student assistance (additional bursaries and scholarships).
The primary reason for the post-budgetary “surplus surprise” is that enrolment has climbed so unexpectedly, during the spring/summer semester of 2023 and especially last fall – when, across all campuses (Windsor, Chatham, and the Toronto “sister school” partnership with the Ace Acumen Academy), 17 percent more Saints found their way into classrooms.
While international enrolment was certainly still the major factor in that admissions increase, the fall semester also saw the first jump in what has long been stagnant/declining domestic student numbers.
Here is Jones’ detailed report to the Board:
The 2023-24 budget approved by the Board on March 28, 2023 provided for a surplus position of $37,924,022 ...
... Based on the mid-year review analysis, the college is projecting a surplus position of $52,113,848 at March 31, 2024, which is $14,189,826 higher than the original budget surplus position.
The revised projection for total operating and ancillary revenue for 2023-24 is $336,774,926, representing an increase of $34,759,105 or 12 percent over the original budget of $302,015,821.
The revised projection for total operating and ancillary expenditures for 2023-24 is $284,661,078, representing an increase of $20,569,278 or 8 percent over the original budget of $264,091,799.
CHANGES TO REVENUE
Overall, revenues increased by $34,759,105 or 12 percent over the original budget. The following highlights compare the original budget approved by the Board to some of the major changes in revenue:
• Total Ministry of Colleges and Universities Operating Grants decreased by $935,765 or 2 percent over the original budget, primarily due to an increase in the ministry’s International Student Recovery program because of higher international student enrolment than planned;
• Total Contract Income increased by $2,076,036 or 26 percent over the original budget due to an increase in the Apprenticeship Grant of $1,032,217 due to higher participation relative to the funded seat plan;
• Increase in Other due to $596,500 of additional wrap-up funding related to the accelerated Personal Support Worker program;
• Total Tuition revenue increased by $19,585,873 or 11 percent over the original budget due to the following:
– Increase in the Domestic Tuition revenue budget of $1,503,042 due to higher enrolment. The current year’s Fall semester enrolment totaled 6,966 full-time domestic students compared to a budget assumption of 6,594 students. Domestic Tuition revenue is subject to adjustments for dismissals, withdrawals, and new students enrolling in the Winter semester;
– Increase in the International Tuition revenue budget of $9,898,561 due to higher enrolment. The current year’s Fall semester enrolment totaled 5,269 full-time international students compared to a budget assumption of 4,279. International Tuition revenue is subject to adjustments for dismissals, withdrawals, student VISA denials, immigration matters, and new students enrolling in the Winter semester;
– Increase in the private/public college partnership (Ace Acumen) Tuition revenue budget of $7,785,472 due to higher enrolment. The current year’s Fall semester enrolment totaled 3,903 full-time Ace Acumen international students compared to a budget assumption of 3,500;
• Total “Other” income increased by $12,880,581 or 20 percent over the original budget due to the following:
– Increase in Interest Income of $5,224,659 due to significant increases in the Bank of Canada’s policy interest rate;
– Increase in public/private (Acumen) Fee-for-Service of $3,219,212 due to higher enrolment;
– Increase in Divisional Income of $4,030,729 primarily due to higher fees collected relating to public/private ancillary fees and international student health and dental benefit fees due to higher enrolment.
CHANGES IN EXPENDITURES
Overall, expenditures increased by $20,569,278 or 8 percent over the original budget.
• Total Salaries & Benefits increased by $4,497,539 or 5 percent. The increase is primarily due to the retroactive and in-year payments related to the Bill 124 November 2022 ruling by the Ontario Superior Court;
• Total Non-Salary Expenditures increased by $15,312,251 or 10 percent. The increase is primarily due to the following:
– Increase in Contracted Educational Services of $8,693,971 due to higher enrolment than planned at the Toronto Campuses, and flowing the applicable funds to Ace Acumen;
– Increase in Contracted Services Other of $3,024,959 due to higher agent commissions because of higher international student enrolment;
– Increase in Insurance of $1,076,913 due to higher health and dental benefit premiums as a result of higher international and PCPP student enrolment.
Administration continues its ongoing efforts of managing expenditures to achieve the overall expenditures budget.
CHANGES IN ANCILLARY (NON-ACADEMIC) OPERATIONS
The Ancillary Operations overall original budget surplus of $544,938 has increased by $392,892 to a mid-year budget surplus of $937,830. This is due to adjustments to the revenue forecasts for the St. Clair College Centre for the Arts take-out operation and the college’s Parking operation.
OTHER MATTERS COVERED DURING THE BOARD MEETING:
• Grads have many opportunities to head down new educational pathways: https://news.stclair-src.org/need-know-news/plenty-pathways-st-clair-grads
• The college as an “economic engine” in southwestern Ontario: https://news.stclair-src.org/need-know-news/college-continues-be-significant-regional-economic-engine